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Risk and Insurance Magazine highlights case study: Tackling Rising Litigation Costs

In 2017, the North American division of one of the 20 largest general insurance and reinsurance carriers worldwide selected Hickey Smith Dodd to participate in its “Outsourced Staff Counsel Pilot Program.”

Based on prior experience, members of the carrier’s management team believed that a well-executed internal staff counsel program typically results in significantly lower legal spend and shorter cycle times as compared to the engagement of retained counsel, while at the same time providing comparable or better outcomes for the claims litigated. The objective of the pilot was to test whether an outside (non-captive) law firm could effectively implement cost- and time-saving elements of an internal staff counsel model.

When the carrier first approached Hickey Smith Dodd, the firm was not on the carrier’s approved panel of outside law firms. However, the carrier was aware Hickey Smith Dodd’s value proposition and approach to claims litigation. The parties held a series of collaborative, “same side of the table” discussions about how the carrier’s objectives might be met. These discussions centered on adaptive staffing models, risk transfer, and Hickey Smith Dodd’s use of process and technology to drive operational efficiencies that reduce legal spend for carriers and clients.

During the nine-month pilot period, the carrier assigned Hickey Smith Dodd a high volume of personal and commercial lines cases in the carrier’s Northeast Region, consisting of New York, New Jersey, Pennsylvania, and Connecticut.

At the end of the pilot period, the carrier compared Hickey Smith Dodd’s performance to the carrier’s historical performance in the Northeast Region. The carrier concluded that Hickey Smith Dodd performed much better than the carrier’s more traditional retained counsel model. Cycle time and legal spend were reduced significantly while case outcomes remained in the evaluated range of the carrier’s claims professionals.

In light of the results delivered during the pilot period, the carrier decided to continue the Outsourced Staff Counsel Program with Hickey Smith Dodd in the Northeast Region and to expand it to other states. In 2018, Hickey Smith Dodd implemented the Program for the carrier in Florida. In 2019, the firm implemented the Program for the carrier in California, Illinois, and Wisconsin.

One question that remained—until recently—was whether Hickey Smith Dodd would be capable of delivering over the long term the same type of significant cost savings the carrier had realized during the pilot period. That question has now been answered in the affirmative.

Late last year the carrier publicly reported that that the Program was responsible for closing 25% of the carrier’s claims litigation annually with an average reduction in legal costs of 48.7% on closed files, which has led to millions of dollars in cost savings to the carrier.

Read the full story, “Tackling Rising Litigation: How QBE North America’s Robert McDade Reduced His Company’s Legal Costs by 48.7%,” as highlighted by Risk and Insurance, here.

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Hickey Smith Dodd anticipates expanding the Program into additional states later this year and in 2023. Further, Hickey Smith Dodd has been in discussions with additional carriers about the development of a similar Outsourced Staff Counsel program for them.

About Hickey Smith Dodd

Hickey Smith Dodd is a law firm purposely designed to deliver legal services with significantly greater efficiency, consistency, and added value. By deconstructing and refining traditional legal processes, applying workflow technology, and collecting and analyzing data, Hickey Smith Dodd is transforming the way legal services are delivered today. With an unrivaled combination of disciplined processes, technology expertise, and business leadership, Hickey Smith Dodd clients benefit from reduced total legal spend, improved quality, enhanced transparency, actionable insight, simplified management of outside counsel, and increased control. For more information, visit hickeysmith.com.

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